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Issue Date: Vol. 51, No. 2, February 2011, Posted On: 2/4/2011

Sweeps Games Storm Intensifies In VA And NC

Marcus Webb
sweepstakes games, Internet-based sweepstakes videogames, Virginia senate Courts of Justice Committee, Spotsylvania County tobacco shop, sweepstakes cafés, Gov. Bev Perdue, video poker, coin-op news, Entertainment Group of North Carolina, Brad Crone, electronic gaming

RICHMOND, VA and RALEIGH, NC -- A proposed ban on Internet-based sweepstakes videogames in Virginia passed a key state Senate committee (Courts of Justice Committee) by an 8-5 vote.

Separately, the Virginia Supreme Court has a sweepstakes videogame case in its docket. Local prosecutors closed down a Spotsylvania County tobacco shop for running the devices; the owner sued the state.

Local Virginia police raids on sweepstakes cafés are continuing around the state. The latest, in Portsmouth, saw officials seizing equipment from one venue and serving a warrant at a second.

In North Carolina, a growing number of newspapers have published reports that Gov. Bev Perdue is considering legalizing sweepstakes videogames to help make up the state's $3.7 billion budget shortfall. Some industry spokesmen have estimated the current sweepstakes videogame market at $1.8 billion annually.

A recent newspaper story also confirmed that the plan under review by Perdue's administration would put legal sweeps games under the control of the state lottery, effectively shutting down existing operator-run sweeps devices.

Perdue's spokesman will say only that the governor "has not made any decision yet."

Partial enforcement of North Carolina's statewide ban on sweeps games began Jan. 1. The law was originally intended to ban all videogame terminals running sweepstakes games. But last November, a superior court ruling awarded First Amendment protections for games with amusement-style gameplay in place of casino-style gameplay.

In recent weeks, some sweepstakes videogame operators have reported that amusement-style gameplay is proving surprisingly popular with customers. Many observers had expected these games to earn much less after casino-emulation presentations were removed.

Brad Crone, a spokesman for the Entertainment Group of North Carolina, said operators would be happy to work with Perdue to regulate operator-run sweepstakes games. EGNC has repeatedly published estimates of $500 million in annual tax revenues to the state from regulation.

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